Bank of Korea Sets up New Loan Programs for Brokerages and Insurers
Posted on 04/16/2020
The Bank of Korea, the country’s central bank, disclosed that it will formulate a new loans program for local brokerages and insurers. The new program will permit Korean brokerages and insurers to borrow funds for up to six months against collateral that includes AA- rated corporate bonds, at the rate of 85 basis points above that of 182-day Monetary Stabilization Bonds. Under the special loan program of 10 trillion KRW (US$8.1 billion) local banks, brokerages, and insurers can take out special loans against collateral from the Bank of Korea.
The new loan program will start May 4, 2020. The program will last for three months.
These measures are for funding strains as the Wuhan coronavirus pandemic roils businesses and financial markets.